Tony Baldwin
Business | Policy
 
 
     
 
 
 
 
 
 
 
 
 
     
Formation of Contact Energy
1995 - 1996

Objective

To establish a significant competitor to ECNZ and move toward a competitive wholesale electricity market in New Zealand

Key steps

This was a major policy and commercial transaction, with a complex set of processes and relationships. The essential elements were as follows:

  • Assess costs, benefits and risks of moving toward a competitive market for electricity
  • Report to Cabinet
  • Analyse possible generation configurations, including expected impacts on value, electricity prices, security of supply, the environment, existing supply contracts, and transmission
  • Design a transitional regulatory framework
  • Develop an implementation strategy
  • Report to senior Ministers and obtain Cabinet approval
  • Negotiate with ECNZ, including detailed discussions with ECNZ's financial, economic, engineering and environmental consultants
  • Consult with a broad range of interest groups
  • Draft a memorandum of understanding between the Government and ECNZ
  • Present package to industry and media
  • Undertake consultation with Maori under Crown Treaty obligations
  • Negotiate sale and purchase agreement for transfer of assets and liabilities
  • Form and oversee SOE development group, to prepare business plans for new company (Contact Energy)
  • Advise Cabinet on final decisions
  • Establish new board of directors
  • Oversee the development of new rules and governance body for an independent wholesale electricity market, including related Commerce Act issues

My role

My role was to lead this project for the Government through each of the key steps outlined above. Particular inputs included:

  • Helping to design the strategy and implementation steps
  • Leading negotiations for the Government with ECNZ at a senior management level
  • Coordinating and critiquing inputs from various government departments and a diverse range of lawyers, merchant bankers, economists, engineers and interest groups
  • Drafting and presenting key reports to Cabinet
  • Drafting the memorandum of understanding between ECNZ and the Government
  • Leading the consultation process with Maori under the Government's Treaty obligations
  • Liaising on communications strategy and implementation

Publications

"Memorandum of Understanding between the Government of New Zealand and the Electricity Corporation of New Zealand", 8 June 1995 - published in the New Zealand Gazette, 22 February 1996, Issue No.16. Tony led a small team to draft this document, which sets out the key elements of the Government's 1995 industry restructuring package, including the formation of Contact Energy.

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